The timing was excellent last week for Luiz Inácio Lula da Silva, the president of Brazil, who received the Prince of Asturias Prize for International Cooperation in Oviedo, Spain. The award was given for his “admirable record of fighting for justice,” his status as a “symbol of hope,” and his role as “the promoter of political attitudes marked by good sense.” He got the prize at a time when, contrary to all predictions, the indications from his first six months in office are positive. The skepticism of those who believed that his lack of experience might lead Brazil to economic meltdown is now slowly evaporating.

Lula has proved to be a capable negotiator and a decisive executive. Every day it is clearer that, even though he won office with his left hand, he is now governing with his right. Those who accused him of being a dogmatic socialist have been forced to eat their words. Lula and his party—the Workers’ Party, or PT—arrived in Brasília and grasped the reins of the economy, which was in a very uncertain condition. When it became clear he might be elected, the country was perceived to be at great risk, and the value of the real [Brazilian unit of currency] plummeted. And then just when observers closed their eyes so they would not have to watch the disaster hit, Lula chose to continue his predecessor’s economic orthodoxy and followed the recipe to the letter.

He has been so rigorous in his economic policy that this week former President Fernando Henrique Cardoso asked whether this much austerity was necessary. The debate, however, has made it plain that globalization is a road that must be taken. The hope of the millions who voted for him is that he will turn out, in the end, to embody neo-liberalism with a kinder face.

Financial markets have reacted positively, according to some analysts, more because of what Lula has not done than what he has. The real has stabilized at its June 2002 level of less than 3 reals to the dollar, and investors are once again looking south. The government is working well, some people say, because every day it has less of a PT face.

The job of quelling the panic unleashed by the elections has not been easy, and the path to sustained growth is full of potholes. Among the top problems are unemployment—in greater São Paulo it is around 20 percent—and high interest rates—26 percent—which are suffocating the economy. The big dilemma now is how to reduce them without setting off inflation that would kill already weak demand.

Looking beyond the economy, the picture is not a happy one. Brazil is still a country of stunning inequalities: One percent of the population receives the equivalent of 13.3 percent of the gross domestic product; there are more than 40 million poor people, while 30 million live in absolute misery. And this situation shows no sign of changing. There are few consumers in Brazil, with little to spend, and that is why so much hope is directed at increasing exports.

Whatever the critics say, the balance of trade reflects a public and private effort aimed at expanding international markets. Exports are increasing sharply, and the nation’s trade surplus this year will be higher than US$17 billion, thanks in large measure to spectacular growth in agricultural exports.

Lula knows that it is necessary to open new horizons. A great supporter of Mercosur, he has made common cause with Néstor Kirchner, Argentina’s president, to strengthen this trade bloc, which has been in intensive care since the devaluation of the real in 1999 and the disastrous Argentine financial crisis. And all signs are that Mercosur is prepared to add Peru and Venezuela to create a solid front rather than compromise with the [U.S.-backed] Free Trade Area of the Americas, which has few friends in Brazil.

Among the enemies of [South American] integration, the staunchest have been the PT’s own cadres, but this has not been the only front against which Lula’s party has aimed its heavy artillery. Nowadays, the president’s greatest difficulty is dealing with the extremists of the party he founded more than 20 years ago.

Economic discipline, reform projects, and the search for political majorities are seen by the radicals within the PT as a betrayal of leftist ideals and of his campaign promises. They have not watched happily as Lula has transformed himself into the Tony Blair of Brazil by putting a party traditionally on the left in the center of the political spectrum, as Blair did with Labor.

In this effort, the president has persevered and has threatened to expel the rebels. And in the case of what ought to be his real opposition—a patchwork of parties outside the government—Lula seems to have been able to gather them into a coalition that, although vulnerable, is no more so than what has been assembled in the past to achieve governability.

It is precisely in this creation of political majorities where Lula’s negotiating skills have been most in evidence. He has managed to get the great barons of the opposition to provide their votes in Congress. Another major achievement was to get the multiparty governments of the states to support his key projects—tax reform and the redesign of the bankrupt social-security system—during his political honeymoon. This was something that not even Cardoso, who enjoyed more comfortable majorities, was able to bring off during his two terms.

Although the road to achieving these reforms has only begun, and the effort has cost Lula his first vocal opposition—demonstrations and strike threats from those minorities who see their rights in jeopardy—it is clear that the Brazilian public believes the president should stay on track. However, those who voted him in continue to wait for his promised social programs. The star of his platform—the “Zero Hunger” plan—launched with great fanfare, has so far yielded disappointingly little.

Not all of Lula’s administration has been deals and demonstrations. The metal worker who did not finish high school has done well on the international stage, and not because of his brilliance. Lula has exported his charisma and proved that, even though he still cannot speak English, he can use his warm personality and ability to govern to make friends.

Lula’s magnetism has extended beyond Brazil. His speeches on the importance of creating ties among emerging nations, making world trade fairer, and strengthening South-South cooperation have induced heads of state around the globe to invite him to visit. His neighbors seek him out and ignore it when he slips up. Lula has been able to make it unimportant that his relations with Venezuela’s President Hugo Chávez have sometimes been uncomfortably close, and that he refused to label the [Colombian rebel group] FARC as terrorist. And people simply forgot about his offer of political asylum to Saddam Hussein.

In Davos, Switzerland, where he made his debut among the world’s top heads of state, Lula stole the show and got the ovations. Invited to the G-8 meeting by France’s Jacques Chirac, he was applauded by hundreds of French who came to see him. During the meeting, he got President George W. Bush’s ear and laid the foundations for his visit to Washington—his second—last week. This came despite the support Brazil has provided to Fidel Castro and despite his refusal to support the U.S. invasion of Iraq. Most recently, at the Mercosur meeting in Asunción, Lula gave cohesion and political motivation to the group.

What is happening on the international stage is a little like what is occurring in Brazil, where Lula is loved and respected. But it is clear that Lula is not important just because he governs the world’s fourth-largest democracy. He has earned his place because he represents, at home and abroad, the hope that there is a political alternative. The democratic left has found in President Lula a model to emulate.